US: FIGs keep leading way in booming high-grade market

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A slowdown is likely on the cards for the US high-grade market in this holiday-shortened week after last week’s whopping US$39.8bn in issuance, which was the fourth-largest week on record, and our call is for a relatively subdued US$20bn area in issuance over the next four sessions.

That said, JP Morgan and Morgan Stanley were quick out of the gate, as both announced multi-part benchmark trades relatively early this morning – perhaps because of another massive snowstorm expected to wallop the US east coast today.

If the other money-center banks that reported at the end of last week – Goldman Sachs and Citigroup – also come to market this week, that will obviously boost the tally substantially. South Korea’s Kookmin Bank is also out this morning with a three-year floater. US investors have been especially keen on short-date floating-rate issuance so far in 2014, though with so much supply out this month, it has been no surprise to see new-issue concessions starting to drift up last week.

The week ahead is relatively light on economic data, except for Thursday, when we get initial jobless claims, the Markit flash PMI and existing home sales. Investors meanwhile will be focused on a busy corporate earnings calendar, with 69 S&P 500 companies reporting this week, including Johnson & Johnson, Microsoft, IBM, P&G, McDonald’s and Verizon.

USD HIGH-GRADE PIPELINE

Metro de Santiago, AA-/A, will start investor meetings next week via BBVA and Deutsche Bank ahead of a possible 144A/Reg S transaction. The borrower will be in London on January 22, New York on January 23 and in Los Angeles on January 24. The following week it will be in Boston on January 27.

Korea Gas Corporation, rated A1, A+ and AA-, has mandated Bank of America Merrill Lynch, Barclays, Goldman Sachs International, J.P. Morgan and UBS to arrange a series of fixed income investor meetings in Hong Kong and the US this week. A transaction may follow subject to market conditions.

Indian Railway Finance Corporation Limited (“IRFC”), rated Baa3/BBB-/BBB-, has mandated ANZ, Barclays, Deutsche Bank and The Royal Bank of Scotland to arrange a series of fixed income investor meetings in Singapore, Hong Kong and London, commencing 14 January 2014. A USD-denominated senior notes offering under Regulation S may follow.